What is Moonlighting?

August 4, 2023

This article has been written by Adv. Aniket P. Kamtam, a 2nd Year MBA-LAW Student from SVKM’s NMIMS SBM College, Vile Parle West.

The Black’s Law dictionary Definition: The fact or practice of working at a second job after the hours of a regular job. Also termed dual employment or multiple job holding.

In Current days competitive world one or the other dreams to have a multiple source of income and this dream of perseverance drives the work force of the country towards the Moonlighting.

The current day 50th Chief Justice of India Dr Justice Dhananjaya Y Chandrachud was also once a moonlighter during his young days he used to do job of radio Jockey at All India Radio1.

But the question is whether the Moonlighting is legal in India?

The answer to this question is complex. The employer will never want his employees to work beyond the business hours for rival firm, so he will have an exclusive agreement with the Employees that they will be abiding to the policy of one person one job. Currently in the information technology sector this is the most common practice were employees are not permitted to do other job regardless of that job is irrelevant to his base job.

Now let’s see the statutory stand point on moon lighting!

Law no were interprets the term moonlighting but the exclusivity of Job.

A food delivery service called Swiggy6 unveiled an industry-first “Moonlighting policy” in August 2022 that permitted its employees to take on additional projects after work hours, subject to certain restrictions. But some prominent Business leaders called moonlighting as a cheating by employees on Employer.

In India, it’s no wrong to hold multiple jobs without breaching the law. However, a person with a comparable set of employment could raise worries about a breach of confidence because many employers often forbid employees from holding down more than one job in their employment agreements. In current day most of the employee’s contract stipulates non-compete and exclusive employment, as is the case with the majority of traditional employment contracts, moonlighting might be regarded as cheating and can lead to contractual liability. It is deemed to be considered permissible if the employment contracts do not contain any such clause or offer exceptions.

Factories act. 1948

As per section 2(m) IT companies which are asset light business model and have the IT services business are not termed as factories. Explanation “For the purposes of this clause, the mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any premises or part thereof, shall not be construed to make it a factory if no manufacturing process is being carried on in such premises or part thereof”. Hence the IT industry is not regulated under this law. But section 60 of Factories act, 1948 prohibits Double employment. Read like this “. Restriction on double employment.—No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save in such circumstances as may be prescribed”.2

Industrial Employment (standing Orders) Act, 1946

As per the INDUSTRIAL EMPLOYMENT (STANDING ORDERS) CENTRAL RULES, 1946 [SCHEDULE I-B]

Model Standing Orders on additional items applicable to all industries Clause (8) “EXCLUSIVE SERVICE A workman shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the establishment, which may adversely affect the interest of his employer” this provision is existing from 1983 in India.

Industrial Relations Code, 2020
under Industrial Relations Code, 2020 Draft Model Standing Orders Rule 22 say that the employee can do dual job by the consent of employer. “22. Exclusive Service. – A worker shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the industrial establishment, which may adversely affect the interest of his employer, but, the employer may permit him to take up additional job, assignment with conditions or without conditions and the worker shall obtain prior permission of the employer”3.

Shops and Establishment act.

Ever state has its own shops and establishment act, this is the subject matter of the state as per schedule 7 of the Indian constitution.4

The current Maharashtra shops & establishment act, 2017 is silent of the employees working for Dual employment, but there is a provision Section -35 Rights and Privileges under other laws etc., not affected. “Nothing in this Act shall affect any right or privileges which a worker in any establishment is entitled to at the date of commencement of this Act under any other law, contract, custom or usage applicable to such establishment or any award, settlement or agreement binding on the employer and the worker in such establishment, if such rights or privileges are more favorable to him than those to which he would be entitled under this Act.” Hence the other laws like factories acct, Industrial relationship code will apply. That means as per the relevant law the employee can choose whether he has the right to do the dual employment. Also he can have his Employee-employer agreement curated as per his requirement for dual employment.

Now Delhi shops and establishment act, 1954 prohibits the employees from taking dual employment “9. Restriction on double employment: No person shall work about the business of an establishment or two or more establishments or an establishment and a factory in excess of the period during which he may be lawfully employed under this Act”5.

Moonlighting is good or bad is the subject matter of the employer and the vision of its firm if the employer thick that the human talent of his firm is the rare precious then the respective firm will never permit its employees for moonlighting. Moonlighting is not the stringent issue for the ongoing employees but for the new prospective employees they take the benefit of loop holes in law and get the high negotiating deal with the recruiters. They may ask for the enhanced Variable pay than the existing employees, but this happens if your talent is rare in the labour market and you are fit to be employee in the so called firm.

Restrictive covenants imposing an unreasonable hardship on employees are generally not enforced by courts. Some middle path solutions to issue could be operating part time for various employers but with maintaining confidentiality ,work based contracts, retainership contracts or even have employment contracts accordingly framed .Most importantly factum of other employers should not be intentionally and malafidely concealed.

Disadvantages of Moonlighting: You will be getting all the statutory labour benefits of one employment only, you won’t enjoy dual welfare scheme facilitates. All your public records will be approaching only one employment as your occupation. We can say that moonlighting is legal in India but may not be ethical, because it showcase ours dual intentions and desires.

Companies can know if an employee is moonlighting and working for its competitors using their Universal Account Number (UAN) of the Employees’ Provident Fund (EPF). Companies can access an employee’s UAN number to get to know if two PF contributions are being made by different companies. When two PF contributions are being made simultaneously to a UAN, it is a clear indication of moonlighting by the employees7.

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August 4, 2023